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Hurry! Our Loss Could Be Your Bigger Loss! (Zona 2 for sale)

And so it continues. Gringo with an idea opens a bar in Costa Rica with his life savings, and either goes broke in the process, or finds someone at the last minute to buy him out, thereby passing the punk to some other unsuspecting dumbass.

Zona II is for sale. Of course it is... The last rancid limb of the Frankenstein Zona Blue experiment. The punk has been passed a dozen times, and Jimmy's hoping it can be passed one last time. And if he manages to sell it, so will the guy who buys it in about a year. Like musical chairs, only with pensions as chairs and bad ideas as the music.

Something doesn't add up. And the real story will only unfold after the check has cleared. The entire building isn't worth $375k USD. But that hasn't stopped Jimmy from asking for it. Based on bogus cash flow and if you're lucky enough to see them, cooked books.

But to understand the ridiculousness of what's going on, you should probably know how it came to this. So here's the history of Zona Blue, and how it became Zona II.

Back in the day (2006), there was a quaint little massage parlor named Zona Blue. A guy named Eddy from New York bought it with the plans of making a go of it.
Eddy did quite well. Aside from the basics of doing a good job, economic winds were at his back. There was tons of money flying around the US at that time, and tons of guys were going on vacation to Costa Rica for all kinds of reasons. But mongering was right up there. With tons of tourists coming to town by the plane loads, and Eddy’s ability to fill the place with desirable talent, business was booming.

Zona Blue was a simple brothel back then, there was a rolling cart that served as a ‘bar’ in the corner, and guys would buy drinks for themselves and the girls non-stop. Short time rooms served as quickie-closets, and he converted the upstairs bodega to 4 respectable suites. Business was good.
He opened a cigar room near the entrance, complete with a walk-in humidor. In addition to what the brothel made, the bar and ‘hotel’ made, he now could sell cigars for a premium. Zona Blue became the talk of the town.

Chapter Two:

Somewhere in 2007, a guy from Chicago bought the building next door and built hotel rooms. Obviously, he and Eddy had some kind of arrangement prior, and when they knocked the wall down, they renamed the place Hotel Little Havana.
Business was good. Tourism was fantastic, and the place had a great reputation. Having a roster with the famous Karen, Pam, Laura, and a few other stunning chicas available didn’t hurt.

Chapter 3:

In late 2008, there was some kind of rift between Eddy and Joe, and Eddy left. At around the same time, there was an internal issue between the house and the girls, and a lot of the girls left. Just like that…

Towards the end of 2008, the recession landed and the panic was on. 2009 was not a good year for Hotel Little Havana. Business fell off and the chicas gained weight. This period ushered in the downshift of the Costa Rica monger scene, and the beginning of the shift towards Jaco.
Joe skippered a couple of mediocre years. And the place started to fade from the radar. He had a couple of retarded managers for both the hotel and the cigar bar, which sped up the demise of business.

Chapter 4:

In early 2012, Boyd, who was a marketer around town. Running poker games and did a short stint at the Dunn Inn before getting let go. Boyd was an excellent marketer, and came to terms with Joe for a job there as a marketing manager. It wasn’t like Joe was packing them in. Almost immediately, Boyd started packing the place, with room specials and happy hour promotions. Boyd was on the job, and the place was better for it.

After a few months of working at HLH, Boyd was back at the top of his game. The place was lively, and the party was on. I managed to refer a couple of cute chicas to him that I’d found at some of the lower end places around town, and they managed to do well for themselves and Boyd.
Boyd managed to put a group of investors together to Buy Joe out. Joe was never in his element there, and this group was eager to jump onto Boyd’s momentum to fortune and fame. Things were looking great for everyone involved.

This is where I’d like to tell you they all lived happily ever after. But if you know anything about anything about this, you know it didn’t play out that way.
Boyd was a good host, but the long hours, the drinking, and the madness of having his Nicaraguan wife around all those hookers made for a bad stew.
Boyd was drinking every day, and it wasn’t so much the drinking that caused the lion’s share of the problems. It was the showing up at 9:00 am to work with a splitting headache and burning stomach that did him in.

Sidenote: Boyd was a poker player, and not a very good one. After drinking all day at work with the guests, he would borrow from the petty cash box and head over to the now closed Horseshoe Casino to play some poker. It might have helped if he wasn’t always drunk when he played. But I think you guys can put together what happened with the money.
Anyway, Boyd walked in one morning, and one of the girls that worked there started in about something stupid and the combination of whiskey sickness, ongoing stress, and not wanting to listen to her bullshit any more came to a head. In a heated argument, he shoved her down the stairs. This was only 4-5 stairs, and she wasn’t injured, but it was still one of those moments that couldn’t be taken back. The partners called for a shareholder’s meeting the following Wednesday.

It didn’t take a genius to know how that meeting was going to play out. So Boyd cleaned out the safe Tuesday night and nobody’s seen him since. This all took place in the summer of 2012.
Sidenote 2: Jimmy, A local bookmaker and friend of Boyd’s had asked Boyd to park his car at his place while he was in the states sorting a few things out for a couple months. During the period Boyd was waiting out that meeting, he sold Jimmy’s car to add to his outgoing severance package.

Chapter 5:

HLH was in limbo for a few months. Nobody really knew what to make of it all. A couple of the partners came in to man the ship, but none of them really had any marketing or hospitality skills, so it stayed in limbo. It was open, just nobody knew what to make of its future. Enter Jeff.

Jeff was a jolly guy and regular visitor to the gulch. He had put in his time at the local fire department in the Florida Keys and sustained an injury that led to his retirement. He had a comfortable pension and seemed on his way to live out his days drinking and whoring in the gulch. Where his 400 pound figure wasn’t an issue with the ladies. Until he got an idea…
Jeff, who had a drinking problem and zero experience with anything bar related that didn’t involve running up several hundred dollar tabs and taking his clothes off, decided he’d buy out Boyd’s interest from the partners and Jimmy, who had assumed Boyd’s shares in lieu of the money Boyd owed him, and become managing partner of HLH.

Jeff was a nice guy. A very nice guy. He was generally well liked around the gulch, and had the endorsement of Saint Bill, the patron saint of Barrio Amon, and owner of the Sportsman’s Lodge. Everyone was sure this newly recharged group would charge to victory and that would be the last of the drama that’s plagued this once thriving enterprise.

Jeff wanted to hit the ground running and make a splash, so he bought some big screen tv’s, a very expensive sound system only he knew how to use, and knocked out a few walls and made a kitchen at the end of the bar. He put in thousands of dollars of surveillance equipment, and spend another $10,000 on some other things, just ‘cause. By the time he got settled in, the place needed to make $28,000 a month to pay all the bills. That’s not a terrible nut to make, considering you have 14 rooms and a bar.

The simple problem Jeff would never be able to overcome, no matter how well he did everything else, is he hadn’t remembered what his actual business was. Whores.

He had put so much focus and money into the peripheral items, that he’d ignored the core business, and the reason everyone walked in. The girls were showing up when they felt like it, playing on their phones all day and ignoring potential clients, and when they did talk to the clients, they would refuse to fuck the guy on premises and make arrangements with him for later at his hotel off the property.

There’s really nothing worse than a whorehouse people can’t get laid in…

Add to all this, Jeff’s bar tab was sometimes bigger than the day’s receipts on any given day, and he still thought getting knee-walking drunk and taking his clothes off was a sound business decision. Remember, Jeff weighs in at over 400 pounds.

In the end, it was simple arithmetic that did Jeff in. 2013 was a horrible year for the Costa Rica tourism industry, and even worse for the monger friendly hotels. He would have flopped in the most robust tourism climate, but the shitty downturn of 2013 added nitroglycerine to the engines of failure.

Facing deficits, and with a group of partners that were tired of getting cash calls when they would have rather been getting dividends, they refused further investment with the exception of the mortgage they had on the building they bought from Joe, next to the original Zona Blue location.

Jeff’s plan was to play hardball with the owner of the corner location by skipping a few payments (it wasn’t like he could pay anyway). Then renegotiate the lease downward. That didn’t work so well. Which brings us to chapter six…

Chapter 6:

I remember sitting in the smoke room at what was left of the corner building of HLH. The owner had the power cut, and Bruce was using lamps and hanging lights run from an extension cord next door while we were having a cigar and shaking our heads at the madness. Jeff had come in to explain this idea about an indoor pool in that location, and Jimmy happened to come by for a smoke.
Jeff was explaining his strategy for hardballing the owner of the building into reducing the rent to Bruce, Jimmy, and myself. At some point during the next few days, it started to become obvious what had come from that conversation. Jimmy had gone to the owner and negotiated a new lease for just the corner location, where he would open up under a new name and under his own management.

Chapter 6a: Scores

In all the madness after finding out he lost the corner building, Jeff found a married couple to buy the mortgage next door and keep him on as manager. All the former partners had agreed to sell their interest at a fraction of what they had invested. The new owners, Jason and Kim, came from a gaming background, owning part of an online sportsbook. It seemed odd to me that a couple would go into the brothel business, but hey… who am I to judge.

I’m under the impression Jeff was able to slow his drinking, and particularly his clothing optional philosophy for a while during the period Jason and Kim were present. Something I wished he would have taken into consideration the entire time.

To no avail. As Jason and Kim grew weary of Jeff and the bleeding business, Jeff managed to find another investor to come in and take the financial burden.

Chapter 6b: Zona II

Zona II was a good idea. Nobody could really blame Jimmy for seizing the moment. Jeff was going to sink any ship he was on, it only made since to make a play that didn’t involve him. And in this way, he was able to get the corner location and all the grandfathered licenses and permits, without the dead weight of both Jeff, and the bulky money-losing property next door.
While this corner location and a simple mind for the numbers (Jimmy’s a bookie, after all) are assets, this location has such as black cloud over it, it’s hard not to be skeptical.

Chapter 7a: Scores Closes

Apparently, Jason and Kim, who own the property Scores is on, had enough of the foolishness and locked the doors on Scores and its new ‘partners’. The last report was it was closed, and owed back taxes and payroll.

Does Zona II have a shot? History would suggest not a very good one. The bar business is tough enough even in a dreamlike scenario. It’s in the worst part of the gulch, in the hole. Lodged between other failed venues and tranny avenue.

Knocking up the whores is generally not the best strategy for running a brothel. Another dynamic that will factor in will be Jimmy’s recruiting/impregnating ratio. For a sustainable model, you’d need to recruit twenty pretty girls that stayed at least 90 days each while only impregnating one of them per year.

So... For the low-low price of $375,000., you can buy into the dream. Jimmy's dream... of opening a bar and selling it to an idiot who doesn't know any better.

Under Eddie's management... Or was it Eddy? Fuck... I don't know how he spelled his name...

Zona Blue WAS the Gulch, back in 2006, 2007, 2008... whenever that was...

Eddie was a genuinely friendly and savvy guy. He knew what he was doing. As I said before... I'm not saying that Eddie was Superman... I'm just saying that he knew what he was doing. Sadly... That MAKES you a Superman in the gulch. The fact that you have the tiniest little clue about the business that you're running qualifies you for the Gulch "Freak Show." You are a very rare individual, indeed.

In true Gulch fashion, Eddie's partners (Joe?) said, "Eddie is doing a great job? We're making lots of money? Well! We're not having any of THAT nonsense around here! We should Definitely fuck that up!"

Then Hotel Little Havana came and Boyd was in charge. Now... I think that I may have been a little naive about Boyd. I won't pass judgment on Boyd. I don't know what really happened. I wasn't there. But I'll stand by this statement, even if you pull out all of my fingernails: Boyd was the best fucking marketer that the gulch ever saw. It was four people deep at the bar just to get a drink. If he was a liar and a thief... I don't know. But he dragged battalions of customers around with him, everywhere that he went.

Then Boyd disappeared... coincidentally, at the same time as a lot of cash, and apparently, one motor vehicle. Was Boyd a bad guy? Or did he just get screwed over by so many people that he bailed? I can't say. I wasn't there. Realistically... I'd say that the most likely answer is that Boyd and the people with whom he was involved parted company on "equal terms", so to speak. They fucked Boyd, Boyd fucked them, and that was it. But that's just my guess and my opinion. There are very few businessmen in the Gulch who don't have poop under their fingernails, and whose breath doesn't smell like another man's cock. I'm not trying to be nasty... I'm just trying to be honest and real.

So... Here we are...

Big Jeff was the sweetest, nicest guy in the Gulch. The alcohol and the girls drove him to his ruin. It's a very common tale. Hotel Little Havana is a wave that has already crested -- there's the foam forming -- and we are just waiting for the crash. Mona Lisa? I don't know what the fuck is going on over there, but it's like some kind of weird gangster-feud drive-by that is just waiting to happen. Del Rey already had their drive-by about 2 years ago.

The bright spots are the Sportsmens and Amistad. They still seem to be operating in their own sphere, independent of the weird shit that is going on elsewhere in the Gulch.

Z2 is for sale? Don't. Just... Don't.

-----------------

Back to the Moral of the Story...

Back in the Day...

You walked into Zona Blue, and there was Eddie. Again... I'm not trying to idolize Eddie here, I'm just trying to make the point that it's possible to do it right in the Gulch, and that it's very likely that someone will come in and throw a monkey wrench into that operation. I remember those days... walking into Zona Blue... Eddie was there with a huge smile. He wasn't pimping. He just said, "Come on in. We're happy you're here. We have a lot of beautiful girls. There's an awesome cigar shop right here, and there's the bar! Please... Come in and have a drink or two. I hope you like the place, and I hope you'll stay for a while. And if you leave, I hope you'll come back as soon as you can!"

The first time I went into Zona Blue, I thought, "Wow! This is a slightly different attitude than that 'We just found you under a rock' attitude that I got at the Del Rey. I could chill here for a couple of hours."

ZB was 'Warm.' ZB was family. Eddie, somehow, had attracted the very hottest -- and most importantly -- Personable -- girls in San José who were willing to fuck a Gringo for $40. The famous Karen, Pamela, and that girl that Pamela told everybody was her sister. The first time that Pamela introduced me to her "sister", I just said, "Wow! You guys look exactly alike!"

I figured... Why bust the energy of a decent fantasy? They play their games, and I play mine. I still remember saying, "Oh Yeah! Pamela! Oh Yeah! Pamela's Sister!" while I blasted all over them.

After Eddie left, all I ever heard from the ZB and HLH girls, when I had them in a private situation, was "It wasn't like this when Eddie was here", "I miss Eddie", "These guys are OK, but they're not Eddie", "Do you remember Eddie? Those were good times", etc.

Once again... Nobody was saying that Eddie was Superman. The girls were saying the same thing that i was saying... Eddie knew what he was doing... The rest of these guys are Idiots. It's not tremendously difficult to run a good biz in the Gulch... But you do have to know what you're doing, and you do have to put some effort and personality into it.

There is no doubt that the street corner that ZB occupies is a shit-hole, just like a lot of other corners in downtown San José. That is no slam on San José -- plenty of street corners in Los Angeles, Detroit, Memphis, etc. are also shit-holes. I've lived in those places -- I've seen it. But Eddie... With no Superhuman skills... just some decent work and a decent attitude... turned this little bar and MP, on this shit-hole corner of San José, into a Gulch Icon.

And then... some other guys came along and said, "This business model is working far too well. We can't have any of THAT SHIT going on in San José! Let's fuck it up!"

So... There were these 3 or 4 guys (I think it was 4) that were pumping up the re-opening of the Clarion as Hotel Mona Lisa. There was this really friendly guy named Tom, and these other 3 guys that avoided you like the plague unless they thought you were a High Roller. Tom was nice. I heard from a few people that his professional dossier was not exactly... shall we say... "free of criminal and civil charges." But... actually... That's not my business. I don't know if that was just rumor-spreading... and it's not really relevant to the story.

I had talked with Tom on several occasions, and he was hanging out at the Sportsmens a lot. I give him Kudos for that. A lot of guys won't make friends with the competition, but that's the best thing that you can do. Tom did that. That was smart. A few months later than expected, the Mona Lisa opened. Instantly, it was very apparent that everything was completely fucked up. The policies, the management, the layout... Mona Lisa was really very close to being on target, but it tried to act like it was the biggest dog on the block from day one. I stayed in one of the rooms in Mona Lisa about 3 months after it opened, so I could write a report on it for my business. Everything in the room looked like it was 50 years old, and it smelled like Grandma's house. Now... Don't get me wrong... Everything in the room was immaculately clean, and some of the interior details were intricate and elegant. But it was pretty clear that nothing had been renovated in decades.

The first floor (entrance, reception, and casino) is gorgeous! There's no doubt about that. But it didn't take long for vast swaths of floor-space to become empty, as tables and slot machines were removed. I remember being in Mona Lisa one day with some friends. Somebody asked, "What do you guys wanna do?" I was staring at the massive expanse of bare floor, and I just blurted out, "I'm in the mood for a game of Cricket!" The other guys followed my gaze and busted out laughing.

After Mona Lisa opened, even Tom wouldn't spend more than 20 seconds talking to me. "Hey! I'm happy that you came in! How you been? [ phone beeps ] OH SHIT! I gotta go!"

Pretty much the same with the other managers. "Hey! Thanks for coming in! Yeah! You don't look like someone who has a few million dollars to invest. I gotta go!"

I ate in the restaurant just a few months after Mona Lisa opened. I was like... "Damn! That's the best freakin' steak that I've had in a LONG TIME!"

The next time I came into the Mona Lisa, I asked, "You think the chef has any steaks like the one you had on the "Specials" list a couple of weeks ago?"

Somebody said, "Oh... We fired the chef."

I said, "Figures. I'm shocked."

About 3 weeks later, I was at the Sportsmens. One of my colleagues came up to me and asked me, "I know you're looking for some property investments. I heard the Mona Lisa is looking for an investor."

I smiled wide and said, "Really?!?! How much do they want?!?!"

"I don't know. I think about $400,000, but I'm not sure."

I thought for a moment, and then said, "Hmmm... That's cool! But... I think that what I would rather do is... Go get $400,000 in cash... Go to the restroom... and flush it down the toilet. That way... I don't have to stress for 18 months about whether or not I'm going to lose my investment money!"

I was talking with a buddy earlier this evening about the old Zona Blue, and I swear... He hit the Nail on the Head!

I had never even thought of this before... but I should have...

He: OK. Who ran Zona Blue 10 years ago?

Me: Eddie.

He: How many people that went into Zona Blue knew his name? How many people even knew who he was?

Me: Oh... You mean like the casual customers? Not many.

He: Who did the customers know?

Me: Well... Karen! EVERYBODY knew Karen! And Pamela... and...

He: That's enough...

He: Now... Who owns the Del Rey? And I mean... How many people have actually met the guy (or guys) and would recognize him on the street?

Me: A very small percentage of people.

He: But they know who the bartenders are... Don't they?

Me: I see where you're going with this...

He: Right! The Del Rey and Zona Blue made the GIRLS the stars. NOBODY wants to go into a "working girls" place with the image of a hairy 50-year-old Gringo on their mind. The Sportsmens can get away with it because it's only HALF about the girls, and because Bill is a great host with a great personality. But an MP or a straight-up hooker joint with an "In Your Face" Gringo owner? NO! Nobody wants that. Everybody that walks into an MP wants to FEEL like they are the star of the show for about 30 - 60 minutes. They can't live that fantasy if "Pimp-Daddy Snoop Dogg" is running the show. It's great to be a good host. Doing that while being almost invisible is the real trick.